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Even though growing a business is going to be an entrepreneur first priority says Edmonton bookkeeping. Ultimately, the reason they start the business is so that they can improve their personal situation. And the only way they can do that is to get paid. Therefore, it is a question that remains on the back of shareholders Minds.

In order to help a shareholder understand when exactly When they’re going to be able to get paid. And understand how much that is. They should talk to their accountant. The accountant will need to dive deep into the finances of the business. In order to answer that question.

But it’s not just the finances of the business that will help a shareholder answer that question. How much money they need to take out of their business in order to survive. Is an extremely important consideration. A shareholder might want to take a certain amount out. But after looking at their personal circumstances. An accountant may discover that they don’t need to take out as much as they would like.

Therefore, Edmonton bookkeeping says that it’s very important that shareholders do a personal balance sheet as well as a personal income statement. These will help paint the picture of their own finances. And help tell the accountant what their personal net worth is. As well as what resources they have at their disposal.

Many business owners don’t want to dig into their savings account in order to live. But if this is going to be necessary to help them grow their business. My understanding that. Edmonton bookkeeping says that shareholders might understand why a bit better.

If they have to live on their savings for 3 to 6 months will they grow the revenue of their business. That will help ensure that they can grow the revenue. Instead of taking a salary from the beginning. And perhaps not being able to grow their revenue as quickly.

This is why it’s important to do the personal balance sheet and personal income statement. Because they may realize that they can live a lot longer on their savings than they first thought. Or, Edmonton bookkeeping says maybe they discover that they cannot live on a savings. And they must start drawing a salary quickly.

When the accountant understand that, then it’s going to be a lot easier for them to figure out how much money they need to draw on a monthly basis. As well as how soon they can start drawing that income. For those entrepreneurs that need to start drawing it immediately. It’s possible as long as the business owner and the accountant are on the same page. And can create the business plan they need to let that happen.

When’s entrepreneurs figure out how much they’re going to be able to get paid and when they can start taking that shareholders draw. It becomes a lot more easy to focus on growing the business then it might if they didn’t have that’s figure it out. By putting shareholders Minds at ease. And understanding when and how much they’re going to be able to get paid. Can allow the shareholders to focus on growing the revenue of their business as quickly so that they can succeed.

Edmonton Bookkeeping | How Shareholders Should Get Paid

In the best-case scenario says Edmonton bookkeeping, shareholders will wait until the revenue of the business has grown. Before they start taking a shareholders draw. Although, this best-case scenario is not always what’s going to happen in a business.

Often, it takes far longer for an entrepreneur to grow the revenue of their business than they think they can. Which requires them to live a lot longer on their savings. If an entrepreneur only has 6 months of a savings lemon. But by six months, the revenue has not increased to that point. They’re going to have to start taking an income in their business sooner than they thought.

In order to figure out exactly how much money they need to live, business owners should do a personal balance sheet and a personal income statement it says Edmonton bookkeeping. This will help them figure out what their net worth is. As well as what resources they have at their disposal.

This is incredibly important, even before an entrepreneur starts living on their savings. Because in order to make that savings stretch as far as possible. They should minimize their expenses first.

They can minimize expenses simply by looking at their personal income statement. Which will show all of the fixed expenses that they have including things such as rent or mortgage. I might include their condo fee or a car payment. All of the utilities that they have to pay as well as phone and internet.

Fixed expenses are bills that entrepreneurs are going to get on a monthly basis, and will be for services rendered. And therefore they are non-negotiable. Often fixed expenses are mandatory such as rent or utilities. But they can include things that may be minimized if someone is so motivated.

For example, In order to minimize expenses a shareholder might decide that they don’t need such an expensive car. And trade it in for when that they don’t have to make car payments on. They may decide to cancel cable, because as an entrepreneur they won’t have time to watch television. Are just some examples of how people can minimize their fixed expenses in order to live on less.

The variable expenses are next says Edmonton bookkeeping, and while these things are not bills on services rendered. They are not necessarily expenses that can be cut indefinitely. These can include things such as grocery bills and Pharmacy bills. But they might also contain things such as meals and entertainment, which can be minimized quite easily.

When A business owner figures out how to minimize their expenses. They can let their savings last longer. Extending the time between starting their business, and needing to take a paycheck from that business.

The sooner a shareholder can do this says Edmonton bookkeeping. The sooner they’re going to be able to save money, and extended. Of time that they live on their savings. So that they have more time to grow the revenue of their business. Before they take a paycheck. Which will help them increase the revenue of their business faster and be successful.